Update on Well TLP-103C and SNPC Cost Reimbursements
29 March 2019
Anglo African Oil & Gas plc (AIM: AAOG), an independent oil and gas developer, is pleased to provide an update on the recently drilled TLP-103C well ('the Well' or 'TLP-103C') at its Tilapia licence in the Republic of the Congo. The Company also provides an update on the repayment of funds owed to AAOG by Société Nationale des Pétroles du Congo ('SNPC'), the Congolese national oil company.
TLP-103C - Analysis of oil at surface
The Well targeted several horizons, including the Djeno, a prolific producer on neighbouring licences. Having encountered oil shows in all target horizons and additional areas, drilling operations at TLP-103C were completed on 26 January 2019.
After leaving TLP-103C to stabilise for a period of 45 days, the Well was opened to release pressure which was building in the tubing. On opening the Well, oil was produced. A sample of this oil was collected and sent to the Congolese state refinery for testing. The results of this test confirm that the oil collected has an API of 43 and that the source of the oil is the Djeno reservoir.
This result therefore confirms the CPI calculations made by Schlumberger in January 2019 which concluded that TLP-103C had encountered oil in the Djeno reservoir. The test also confirms the reservoir's characteristics and indicates that this oil has moved to surface under its own pressure. This new information will be included in the CPR that is due to be published in the coming weeks.
SNPC Repayment of Funds
Following the Company's announcement of 18 February 2019, SNPC has agreed to pay monthly instalments, commencing this month, of US$600,000. These payments will be applied in settlement of monies owed by SNPC to the Company. Before any payment this month, the sum owed amounts to approximately US$9.5m and mostly relates to SNPC's share of the costs of drilling TLP-103C. SNPC has undertaken to send the Company a signed payment schedule confirming the payment plan.
SNPC has also asked the Company to re-open negotiations to exchange a portion of SNPC's equity interest in the Tilapia field in exchange for the forgiveness of the remainder of the debt outstanding once agreement is reached. SNPC has confirmed that it intends to continue making the monthly payments during the negotiation, and on that basis the Company has agreed to restart negotiations.
David Sefton, Executive Chairman of AAOG, said: "From the inception of AAOG, the key aim of the Company has been to produce oil from the Djeno. This remains the case today. Confirmation that oil has come to surface from the Djeno reservoir under its own pressure has been a very welcome surprise and confirms the excellent work on the CPI done by Schlumberger.
"We are working with LR Senergy to have this new information included in the CPR which will now be released during April.
"The board has also received a report by a reservoir engineering group who were asked to work on the production plan for TLP-103C and will update the market on these plans once the report has been reviewed.
"Finally, we are pleased that SNPC, in addition to being excellent partners for their technical abilities and deep knowledge of assets across the Republic of the Congo, are also taking a proactive approach to the commercial issue of the debt that has accrued. They are continuing to make payments to us and we look forward to resolving the underlying issue of the size of the interests in Tilapia."
Market Abuse Regulation (MAR) Disclosure
The information contained within this announcement is deemed by the Company to constitute inside information for the purposes of the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via a Regulatory Information Service, this inside information is now considered to be in the public domain.
For further information please visit www.aaog.com or contact:
|Anglo African Oil & Gas plc||Tel: c/o St Brides Partners +44 20 7236 1177|
|David Sefton, Executive Chairman
James Berwick, Chief Executive Officer
|finnCap Ltd (Nominated Adviser and Broker)||Tel: +44 20 7220 0500|
|Christopher Raggett, Giles Rolls, Anthony Adams (Corporate Finance)|
|Camille Gochez (Corporate Broking)|
|St Brides Partners (Financial PR)||Tel: +44 20 7236 1177|
|Frank Buhagiar, Juliet Earl|
Notes to Editors
Anglo African Oil & Gas (AAOG) is an AIM-listed independent oil and gas company that owns a 56% stake in the producing Tilapia oil field in the Republic of the Congo. The Company boasts a low-cost production story in a prolific hydrocarbon region with significant exploration upside, differentiating it substantially from its E&P peers. Additionally, management's remuneration is tied to hitting production milestones, reflecting their strong focus on cost control.